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Note: Nothing in this publication is intended or written to be used, and cannot be used by any person for the purpose of avoiding tax penalties regarding any transactions or matters addressed herein. You should always seek advice from independent tax advisors regarding the same. [See IRS Circular 230.]

Content: Copyright © Integrity Marketing Solutions

Volume Ten Number Six June 2013

Estate Administration & Evaluating Your Assets

A Legacy of Efficiency

Blended Families    Decisions you make today can determine whether your family is provided with a thoughtfully prepared, efficiently implemented and effectively administered estate plan that lays the groundwork for the smooth (and cost-effective) administration of your estate … or a disorganized disaster that creates time-consuming and costly problems.

Three-Pronged Responsibilities of Estate Administration

    The duties of those who serve as your fiduciaries after you have passed away fall into a three-tiered hierarchy of responsibilities. While the precise manner in which these duties are carried out will depend on whether your estate plan is based on a Will or a Revocable Living Trust, tasks that must be handled include:

  • Gathering and managing your assets
  • Settling your financial liabilities: unpaid debts, tax obligations and estate administration costs
  • Efficient administration and distribution of your estate assets
This process will typically be smoother and more efficient if your designated fiduciaries have access to legal advice from an experienced estate planning attorney.

Gathering and Managing Your Assets

    The top priority among the responsibilities that fall to your fiduciaries is the preservation and safeguarding of the assets that comprise your estate. This process involves conducting a careful inventory of your assets, protecting these assets and establishing an appropriate valuation for the assets at the time of your passing. It is important to advise your fiduciaries regarding the location of your asset inventory and accompanying supporting documentation, such as account statements, title documents and certificates.

Typically, a fully-funded revocable living trust will make estate administration much easier, especially if you have maintained current records of the assets contained within the trust. Even if you have relied on a will instead of a revocable trust-based estate plan, you can save your fiduciaries considerable time and headaches by keeping accurate and current financial records that identify and provide values for your assets.

Settling Financial Liabilities: Unpaid Debts, Tax Obligations and Estate Administration Costs

    After all of your assets have been gathered, inventoried and valued, the next step in the administration of your estate involves settling outstanding financial obligations owed by your estate. These may include items such as unpaid debts, tax liabilities and estate administration-related expenses. Just as with the process of gathering and protecting your assets, this stage of the administration process must be handled promptly.

Estate tax returns must be filed within nine months of death. Many post-mortem planning opportunities, such as disclaimers and certain elections (e.g., QTIP, alternate valuation, etc.), must be timely made or they are lost … and with them the opportunities for significant estate tax savings.

Failure to comply with applicable legal deadlines can expose your fiduciaries to some rather unpleasant personal liabilities, including tax liabilities for your estate and lawsuits from creditors and disgruntled heirs.

Efficient Administration & Distribution of Your Estate Assets

    Your estate assets are to be distributed according to the instructions in your will or trust and your fiduciaries are responsible for adhering to those instructions, and for maintaining accurate records and receipts when making distributions to beneficiaries. The importance of this recordkeeping responsibility cannot be overstated because failure to maintain accurate records of income received, expenses paid and disbursements to beneficiaries during the entire estate administration process can result in civil liability and even criminal penalties in certain situations.

The Final Word

    The duties that fall upon a fiduciary can be complicated. The weight of these duties should be carefully considered when selecting your fiduciaries, or when deciding whether to accept responsibility to serve as a fiduciary.


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